Taking the Leap and Opening a Corporate Bank Account

Opening a corporate bank account with a commercial or business bank is necessary for a business to manage their funds. With an account, a business can manage their bills payments, meet debt obligations and pay employees and vendors. You do not need a leap of faith to open a corporate bank account; it is typically a process that is part of the initial steps of a corporation.

Opening a Corporate Bank Account

Opening a bank account for a corporation involves the establishment of a relationship with commercial or business banks. These banks provide specialized services for corporations in order to meet their financial needs.  Some of the specialized services include: detailed itemized statements for separate accounts, maintenance of a payroll or loan escrow account, credit or debit card services for certain corporate employees and other services that a corporation may need.

Establishing a Banking Relationship

The relationship between a corporation and a bank is very important. The corporation should try to keep an account with the same lending institution that the corporation received a loan or other funding from to establish a working relationship. Once the relationship is established, it is easy for the bank to become familiar with the corporation and its business practices. This relationship is beneficial because the bank can provide the business owners with the best advice regarding accounts and services that need to be established in order to help the business grow.

Corporate Bank Accounts versus Personal Bank Accounts

The corporate bank account operates differently than a retail checking account that individuals set up for their personal use. A corporation needs to have the bank work in partnership with its financial and accounting units in order to manage the finances of the corporation.

Corporations should establish a form of banking relationship in order to provide a facility to manage their finances and create an additional outlet for the management of the business. This relationship is important as the business grows and seeks additional sources of funding for future corporate growth.

Process for Opening a Corporate Bank Account

The process for opening a corporate bank account involves an application, application and approval. The process can be completed online, but is better accomplished with face-to-face interaction between the corporate officer responsible for the business’s finances and the bank.  Having a face-to-face allows a relationship process to be built and the ability of the bank and corporation to come to a common understanding of how best the corporation’s financial needs can be met. 

 The corporation places their trust in the bank to manage the finances of the corporation and provide timely information necessary for the corporation to make decisions relative to its expansion and growth opportunities.

Comparing Banks

A corporation should compare the services and earnings from many different banks in order to determine which institution is best suited to meet its needs. This includes reviewing programs from both community and national banks. Typically, the more local a bank is, the more responsive it may be in meeting the needs of the corporation. 

Safety is another concern that a corporation should consider when selecting a bank to establish a corporate bank account. Banks that take undue risks with their depositor’s funds may not be within the prudent requirements of the corporation. Examine the bank’s portfolio; most banks publish the information online.